STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT dated as of May 10, 1998 is by and
between Xxxxx Xxxxxx Incorporated, a Delaware corporation (the "Company"), and
Western Atlas Inc., a Delaware corporation (the "Grantee").
The Grantee, the Company and Merger Sub propose to enter into
the Merger Agreement providing, among other things, for the Merger pursuant to
the Merger Agreement of Merger Sub with and into the Grantee which shall be the
As a condition and inducement to the Grantee's willingness to
enter into the Merger Agreement, the Grantee has requested that the Company
agree, and the Company has agreed, to grant the Grantee the Option.
The Board of Directors of the Grantee has approved the Merger
Agreement, the Merger and this Agreement and has recommended approval of the
Merger Agreement by the holders of common stock of the Company.
The Board of Directors of the Company has approved the Merger
Agreement, the Merger and this Agreement and has recommended approval of the
issuance of shares of Common Stock, par value $1.00 per share, of the Company
("Company Common Stock") pursuant to the Merger Agreement by the holders of
Company Common Stock.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein and in the Merger Agreement, the Company and the Grantee agree as
1. Capitalized Terms. Those capitalized terms used but
not defined herein that are defined in the Merger Agreement are used herein
with the same meanings as ascribed to them therein; provided, however, that, as
used in this Agreement, "Person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act. Those capitalized terms used in this
Agreement that are not defined in the Merger Agreement are defined in Annex A
hereto and are used herein with the meanings ascribed to them therein.
2. The Option.
(a) Grant of Option. Subject to the terms and conditions
set forth herein, the Company hereby grants to the Grantee an irrevocable
option to purchase, out of the authorized but
unissued Company Common Stock, 33,772,146 shares of Company Common Stock (as
adjusted as set forth herein) (the "Option Shares"), at the Exercise Price.
(b) Exercise Price. The exercise price (the "Exercise
Price") of the Option shall be $41.125 per Option Share.
(c) Term. The Option shall be exercisable at any time and
from time to time following the occurrence of an Exercise Event and shall
remain in full force and effect until the earliest to occur of (i) the
Effective Time, (ii) the first anniversary of the receipt by Grantee of written
notice from the Company of the occurrence of an Exercise Event and (iii)
termination of the Merger Agreement in accordance with its terms prior to the
occurrence of an Exercise Event (the "Option Term"). If the Option is not
theretofore exercised, the rights and obligations set forth in this Agreement
shall terminate at the expiration of the Option Term.
(d) Exercise of Option.
(i) The Grantee may exercise the Option, in whole or in
part, at any time and from time to time during the Option Term. Notwithstanding
the expiration of the Option Term, the Grantee shall be entitled to purchase
those Option Shares with respect to which it has exercised the Option in
accordance with the terms hereof prior to the expiration of the Option Term.
(ii) If the Grantee wishes to exercise the Option, it
shall send a written notice (an "Exercise Notice") (the date of which being
herein referred to as the "Notice Date") to the Company specifying (i) the
total number of Option Shares it intends to purchase pursuant to such exercise
and (ii) a place and a date (the "Closing Date") not earlier than three
Business Days nor later than 15 Business Days from the Notice Date for the
closing of the purchase and sale pursuant to the Option (the "Closing").
(iii) If the Closing cannot be effected by reason of the
application of any Law, Regulation or Order, the Closing Date shall be extended
to the tenth Business Day following the expiration or termination of the
restriction imposed by such Law, Regulation or Order. Without limiting the
foregoing, if prior notification to, or Authorization of, any Governmental
Authority is required in connection with the purchase of such Option Shares by
virtue of the application of such Law, Regulation or Order, the Grantee and, if
applicable, the Company shall promptly file the required notice or application
for Authorization and the Grantee, with the cooperation of the Company, shall
expeditiously process the same.
(iv) Notwithstanding Section 2(d)(iii), if the Closing
Date shall not have occurred within nine months after the related Notice Date
as a result of one or more restrictions imposed by the application of any Law,
Regulation or Order, the exercise of the Option effected on the Notice Date
shall be deemed to have expired.
(e) Payment and Delivery of Certificates.
(i) At each Closing, the Grantee shall pay to the Company
in immediately available funds by wire transfer to a bank account designated by
the Company an amount equal to the Exercise Price multiplied by the number of
Option Shares to be purchased on such Closing Date.
(ii) At each Closing, simultaneously with the delivery of
immediately available funds as provided above, the Company shall deliver to the
Grantee a certificate or certificates representing the Option Shares to be
purchased at such Closing, which Option Shares shall be duly authorized,
validly issued, fully paid and nonassessable and free and clear of all Liens,
and the Grantee shall deliver to the Company its written agreement that the
Grantee will not offer to sell or otherwise dispose of such Option Shares in
violation of applicable Law or the provisions of this Agreement.
(f) Certificates. Certificates for the Option Shares
delivered at each Closing shall be endorsed with a restrictive legend that
shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED
AS OF MAY 10, 1998. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE
HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY THE COMPANY OF A WRITTEN
A new certificate or certificates evidencing the same number of shares of the
Company Common Stock will be issued to the Grantee in lieu of the certificate
bearing the above legend, and such new certificate shall not bear such legend,
insofar as it applies to the Securities Act, if the Grantee shall have
delivered to the Company a copy of a letter from the staff of the Commission,
or an opinion of counsel in form and substance reasonably satisfactory to the
Company and its counsel, to the effect that such legend is not required for
purposes of the Securities Act.
(g) If at the time of issuance of any Company Common
Stock pursuant to any exercise of the Option, the Company shall have issued any
share purchase rights or similar securities to holders of Company Common Stock,
then each Option Share purchased pursuant to the Option shall also include
rights with terms substantially the same as and at least as favorable to the
Grantee as those issued to other holders of Company Common Stock.
3. Adjustment Upon Changes in Capitalization, Etc.
(a) In the event of any change in the Company Common
Stock by reason of a stock dividend, split-up, combination, recapitalization,
exchange of shares or similar transaction, the type and number of shares or
securities subject to the Option, and the Exercise Price therefor, shall be
adjusted appropriately, and proper provision shall be made in the agreements
governing such transaction, so that the Grantee shall receive upon exercise of
the Option the same class and number
of outstanding shares or other securities or property that Grantee would have
received in respect of the Company Common Stock if the Option had been
exercised immediately prior to such event, or the record date therefor, as
(b) If any additional shares of Company Common Stock are
issued after the date of this Agreement (other than pursuant to an event
described Section 3(a) above), the number of shares of Company Common Stock
then remaining subject to the Option shall be adjusted so that, after such
issuance of additional shares, such number of shares then remaining subject to
the Option, together with shares theretofore issued pursuant to the Option,
equals 19.9% of the number of shares of Company Common Stock then issued and
(c) To the extent any of the provisions of this Agreement
apply to the Exercise Price, they shall be deemed to refer to the Exercise
Price as adjusted pursuant to this Section 3.
4. Retention of Beneficial Ownership. To the extent that
the Grantee shall exercise the Option, the Grantee shall, unless the Grantee
shall exercise the Put Right or the Company shall exercise the Call Right,
retain sole ownership of the shares of Company Common Stock so acquired through
the end of the Call Period.
5. Repurchase at the Option of Grantee.
(a) At the request of the Grantee made at any time and
from time to time after the occurrence of an Exercise Event and prior to the
earlier of (i) 120 days after the expiration of the Option Term and (ii) 120
days after the conditions to the payment by the Company of the additional $150
million fee under Section 9.5 of the Merger Agreement shall have occurred (the
"Put Period"), the Company (or any successor thereto) shall, at the election of
the Grantee (the "Put Right"), repurchase from the Grantee (i) that portion of
the Option relating to all or any part of the Unexercised Option Shares (or as
to which the Option has been exercised but the Closing has not occurred) and
(ii) all or any portion of the shares of Company Common Stock purchased by the
Grantee pursuant hereto and with respect to which the Grantee then has
ownership. The date on which the Grantee exercises its rights under this
Section 5 is referred to as the "Put Date." Such repurchase shall be at an
aggregate price (the "Put Consideration") equal to the sum of:
(i) the aggregate Exercise Price paid by the
Grantee for any Option Shares which the Grantee owns and as to
which the Grantee is exercising the Put Right;
(ii) the excess, if any, of the Applicable Price
over the Exercise Price paid by the Grantee for each Option
Share as to which the Grantee is exercising the Put Right
multiplied by the number of such shares; and
(iii) the excess, if any, of (x) the Applicable
Price per share of Company Common Stock over (y) the Exercise
Price multiplied by the number of Unexercised Option Shares as
to which the Grantee is exercising the Put Right.
(b) If the Grantee exercises its rights under this
Section 5, the Company shall, within five Business Days after the Put Date, pay
the Put Consideration to the Grantee in immediately available funds, and the
Grantee shall surrender to the Company the Option or portion of the Option and
the certificates evidencing the shares of Company Common Stock purchased
thereunder. The Grantee shall warrant to the Company that, immediately prior to
the repurchase thereof pursuant to this Section 5, the Grantee had sole record
and Beneficial Ownership of the Option or such shares, or both, as the case may
be, and that the Option or such shares, or both, as the case may be, were then
held free and clear of all Liens.
(c) If the Option has been exercised, in whole or in
part, as to any Option Shares subject to the Put Right but the Closing
thereunder has not occurred, the payment of the Put Consideration shall, to
that extent, render such exercise null and void.
(d) Notwithstanding any provision to the contrary in this
Agreement, the Grantee may not exercise its rights pursuant to this Section 5
in a manner that would result in Total Profit of more than the Profit Cap;
provided, however, that nothing in this sentence shall limit the Grantee's
ability to exercise the Option in accordance with its terms.
6. Repurchase at the Option of the Company.
(a) To the extent the Grantee shall not have previously
exercised its rights under Section 5, at the request of the Company made at any
time during the 120-day period commencing at the expiration of the Put Period
(the "Call Period"), the Company may repurchase from the Grantee, and the
Grantee shall sell, or cause to be sold, to the Company, all (but not less than
all) of the shares of Company Common Stock acquired by the Grantee pursuant
hereto and with respect to which the Grantee has ownership at the time of such
repurchase at a price per share equal to the greater of (A) the Current Market
Price and (B) the Exercise Price per share in respect of the shares so acquired
(such price per share multiplied by the number of shares of Company Common
Stock to be repurchased pursuant to this Section 6 being herein called the
"Call Consideration"). The date on which the Company exercises its rights under
this Section 6 is referred to as the "Call Date."
(b) If the Company exercises its rights under this
Section 6, the Company shall, within five Business Days pay the Call
Consideration in immediately available funds, and the Grantee shall surrender
to the Company certificates evidencing the shares of Company Common Stock
purchased hereunder, and the Grantee shall warrant to the Company that,
immediately prior to the repurchase thereof pursuant to this Section 6, the
Grantee had sole record and Beneficial Ownership of such shares and that such
shares were then held free and clear of all Liens.
7. Registration Rights.
(a) The Company shall, if requested by the Grantee at any
time and from time to time during the Registration Period, as expeditiously as
practicable, prepare, file and cause to be made effective up to two
registration statements under the Securities Act if such registration is
required in order to permit the offering, sale and delivery of any or all
shares of Company Common Stock or other securities that have been acquired by
or are issuable to the Grantee upon exercise of
the Option in accordance with the intended method of sale or other disposition
stated by the Grantee, including, at the sole discretion of the Company, a
"shelf" registration statement under Rule 415 under the Securities Act or any
successor provision, and the Company shall use all reasonable efforts to
qualify such shares or other securities under any applicable state securities
laws. The Company shall use all reasonable efforts to cause each such
registration statement to become effective, to obtain all consents or waivers
of other parties that are required therefor and to keep such registration
statement effective for such period not in excess of 180 days from the day such
registration statement first becomes effective as may be reasonably necessary
to effect such sale or other disposition. The obligations of the Company
hereunder to file a registration statement and to maintain its effectiveness
may be suspended for one or more periods of time not exceeding 60 days in the
aggregate if the Board of Directors of the Company shall have determined in
good faith that the filing of such registration or the maintenance of its
effectiveness would require disclosure of nonpublic information that would
materially and adversely affect the Company. For purposes of determining
whether two requests have been made under this Section 7, only requests
relating to a registration statement that has become effective under the
Securities Act and pursuant to which the Grantee has disposed of all shares
covered thereby in the manner contemplated therein shall be counted.
Notwithstanding any other provision of this Section 7, any request for
registration shall permit the Company, upon notice given within 20 days of the
request for registration, to repurchase from the Grantee any shares as to which
the Grantee requests registration at a price per share equal to the Current
Market Price at the date the Company notifies the Grantee of its decision to so
(b) The Registration Expenses shall be for the account of
the Company; provided, however, that the Company shall not be required to pay
any Registration Expenses with respect to such registration if the registration
request is subsequently withdrawn at the request of the Grantee unless the
Grantee agrees to forfeit its right to request one registration.
(c) The Grantee shall provide all information reasonably
requested by the Company for inclusion in any registration statement to be
filed hereunder. If during the Registration Period the Company shall propose to
register under the Securities Act the offering, sale and delivery of Company
Common Stock for cash for its own account or for any other stockholder of the
Company pursuant to a firm underwriting, it shall, in addition to the Company's
other obligations under this Section 7, allow the Grantee the right to
participate in such registration provided that the Grantee participates in the
underwriting; provided, however, that, if the managing underwriter of such
offering advises the Company in writing that in its opinion the number of
shares of Company Common Stock requested to be included in such registration
exceeds the number that can be sold in such offering, the Company shall, after
fully including therein all securities to be sold by the Company, include the
shares requested to be included therein by Grantee pro rata (based on the
number of shares intended to be included therein) with the shares intended to
be included therein by Persons other than the Company.
(d) In connection with any offering, sale and delivery of
Company Common Stock pursuant to a registration statement effected pursuant to
this Section 7, the Company and the Grantee shall provide each other and each
underwriter of the offering with customary representations, warranties and
covenants, including covenants of indemnification and contribution.
8. First Refusal. Subject to the provisions of Sections
4 and 5 herein, at any time after the first occurrence of an Exercise Event and
prior to the second anniversary of the first purchase of shares of Company
Common Stock pursuant to the Option, if the Grantee shall desire to sell,
assign, transfer or otherwise dispose of all or any of the Option Shares or
other securities acquired by it pursuant to the Option, it shall give the
Company written notice of the proposed transaction (an "Offeror's Notice"),
identifying the proposed transferee, accompanied by a copy of a binding offer
to purchase such shares or other securities signed by such transferee and
setting forth the terms of the proposed transaction. An Offeror's Notice shall
be deemed an offer by the Grantee to the Company, which may be accepted, in
whole but not in part, within 20 Business Days of the receipt of such Offeror's
Notice, on the same terms and conditions and at the same price at which the
Grantee is proposing to transfer such shares or other securities to such
transferee. The purchase of any such shares or other securities by the Company
shall be settled within 20 Business Days of the date of the acceptance of the
offer and the purchase price shall be paid to the Grantee in immediately
available funds. If the Company shall fail or refuse to purchase all the shares
or other securities covered by an Offeror's Notice, the Grantee may, within 60
days from the date of the Offeror's Notice, sell all, but not less than all, of
such shares or other securities to the proposed transferee at no less than the
price specified and on terms no more favorable than those set forth in the
Offeror's Notice; provided, however, that the provisions of this sentence shall
not limit the rights the Grantee may otherwise have if the Company has accepted
the offer contained in the Offeror's Notice and wrongfully refuses to purchase
the shares or other securities subject thereto. The requirements of this
Section 8 shall not apply to (a) any disposition as a result of which the
proposed transferee would own beneficially not more than 2% of the outstanding
voting power of the Company, (b) any disposition of Company Common Stock or
other securities by a Person to whom the Grantee has assigned its rights under
the Option with the consent of the Company, (c) any sale by means of a public
offering registered under the Securities Act or (d) any transfer to a wholly
owned Subsidiary of the Grantee which agrees in writing to be bound by the
9. Profit Limitation.
(a) Notwithstanding any other provision of this
Agreement, in no event shall the Grantee's Total Profit exceed the Profit Cap
and, if it otherwise would exceed such amount, the Grantee, at its sole
election, shall either (i) deliver to the Company for cancellation Option
Shares previously purchased by Grantee, (ii) pay cash or other consideration to
the Company, (iii) reduce the amount of the fee payable to Grantee under
Section 9.5 of the Merger Agreement or (iv) undertake any combination thereof,
so that the Grantee's Total Profit shall not exceed the Profit Cap after taking
into account the foregoing actions.
(b) Notwithstanding any other provision of this
Agreement, this Stock Option may not be exercised for a number of Option Shares
that would, as of the Notice Date, result in a Notional Total Profit of more
than the Profit Cap, and, if exercise of the Option otherwise would exceed the
Profit Cap, the Grantee, at its sole option, may increase the Exercise Price
for that number of Option Shares set forth in the Exercise Notice so that the
Notional Total Profit shall not exceed the Profit Cap; provided, however, that
nothing in this sentence shall restrict any exercise of the Option otherwise
permitted by this Section 9(b) on any subsequent date at the Exercise Price set
forth in Section 2(b) if such exercise would not then be restricted under this
10. Listing. If the Company Common Stock or any other
securities then subject to the Option are then listed on the NYSE, the Company,
upon the occurrence of an Exercise Event, will promptly file an application to
list on the NYSE the shares of the Company Common Stock or other securities
then subject to the Option and will use all reasonable efforts to cause such
listing application to be approved as promptly as practicable.
11. Replacement of Agreement. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, the Company will execute and
deliver a new Agreement of like tenor and date. Any such new Agreement shall
constitute an additional contractual obligation of the Company, whether or not
the Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
(a) Expenses. Except as otherwise provided in the Merger
Agreement or as otherwise expressly provided herein, each of the parties hereto
shall bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants and
(b) Waiver and Amendment. Any provision of this Agreement
may be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
(c) Entire Agreement; No Third Party Beneficiary;
Severability. Except as otherwise set forth in the Merger Agreement, this
Agreement (including the Merger Agreement and the other documents and
instruments referred to herein and therein) (i) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof and
(ii) is not intended to confer upon any Person other than the parties hereto
any rights or remedies hereunder.
(d) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
(e) Governing Law. This Agreement shall be governed by,
and construed in accordance with, the Laws of the State of Delaware, regardless
of the Laws that might otherwise govern under applicable principles of
conflicts of law.
(f) Descriptive Headings. The descriptive headings
contained herein are for convenience or reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
(g) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to the parties at the following addresses or
sent by electronic transmission to the telecopier number specified below:
If to the Company to:
Xxxxx Xxxxxx Incorporated
0000 Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X'Xxxxxxx, III
Facsimile: (000) 000-0000
with a copy to:
J. Xxxxx Xxxxxxxx, Jr., Esq.
Xxxxx & Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
If to Grantee to:
Western Atlas Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxx, Esq.
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
(h) Counterparts. This Agreement and any amendments
hereto may be executed in counterparts, each of which shall be deemed an
original and all of which taken together shall constitute but a single
(i) Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option shall be sold,
assigned or otherwise disposed of or transferred by either of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party, except that the Grantee may assign this Agreement
to a wholly owned Subsidiary of the Grantee; provided, however, that no such
assignment shall have the effect of releasing the Grantee from its obligations
hereunder. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
(j) Further Assurances. In the event of any exercise of
the Option by the Grantee, the Company and the Grantee shall execute and
deliver all other documents and instruments and take all other action that may
be reasonably necessary in order to consummate the transactions provided for by
(k) Specific Performance. The parties hereto hereby
acknowledge and agree that the failure of any party to this Agreement to
perform its agreements and covenants hereunder will cause irreparable injury to
the other party to this Agreement for which damages, even if available, will
not be an adequate remedy. Accordingly, each of the parties hereto hereby
consents to the granting of equitable relief (including specific performance
and injunctive relief) by any court of competent jurisdiction to enforce any
party's obligations hereunder. The parties further agree to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such equitable relief and that this provision is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement.
IN WITNESS WHEREOF, the Company and the Grantee have caused
this Stock Option Agreement to be signed by their respective officers thereunto
duly authorized, all as of the day and year first written above.
XXXXX XXXXXX INCORPORATED
By: /s/ XXX X. XXXXXX
Name: Xxx X. Xxxxxx
Title: Chairman of the Board,
President and CEO
WESTERN ATLAS INC.
By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Chairman of the Board
SCHEDULE OF DEFINED TERMS
The following terms when used in the Stock Option Agreement
shall have the meanings set forth below unless the context shall otherwise
"Agreement" shall mean this Stock Option Agreement.
"Applicable Price" means the highest of (i) the highest
purchase price per share paid pursuant to a third party's tender or exchange
offer made for shares of Company Common Stock after the date hereof and on or
prior to the Put Date, (ii) the price per share to be paid by any third Person
for shares of Company Common Stock pursuant to an agreement for a Business
Combination Transaction entered into on or prior to the Put Date, and (iii) the
Current Market Price. If the consideration to be offered, paid or received
pursuant to either of the foregoing clauses (i) or (ii) shall be other than in
cash, the value of such consideration shall be determined in good faith by an
independent nationally recognized investment banking firm jointly selected by
the Grantee and the Company, which determination shall be conclusive for all
purposes of this Agreement.
"Authorization" shall mean any and all permits, licenses,
authorizations, orders certificates, registrations or other approvals granted
by any Governmental Authority.
"Beneficial Ownership," "Beneficial Owner" and "Beneficially
Own" shall have the meanings ascribed to them in Rule 13d-3 under the Exchange
"Business Combination Transaction" shall mean (i) a
consolidation, exchange of shares or merger of the Company with any Person,
other than the Grantee or one of its subsidiaries, and, in the case of a
merger, in which the Company shall not be the continuing or surviving
corporation, (ii) a merger of the Company with a Person, other than the Grantee
or one of its Subsidiaries, in which the Company shall be the continuing or
surviving corporation but the then outstanding shares of Company Common Stock
shall be changed into or exchanged for stock or other securities of the Company
or any other Person or cash or any other property or the shares of Company
Common stock outstanding immediately before such merger shall after such merger
represent less than 50% of the common shares and common share equivalents of
the Company outstanding immediately after the merger or (iii) a sale, lease or
other transfer of all or substantially all the assets of the Company to any
Person, other than the Grantee or one of its Subsidiaries.
"Business Day" shall mean a day other than Saturday, Sunday or
a federal holiday.
"Call Consideration" shall have the meaning ascribed to such
term in Section 5 herein.
"Call Date" shall have the meaning ascribed to such term
in Section 5 herein.
"Call Period" shall have the meaning ascribed to such term in
Section 5 herein.
"Closing" shall have the meaning ascribed to such term in
Section 2 herein.
"Closing Date" shall have the meaning ascribed to such term in
Section 2 herein.
"Court" shall mean any court or arbitration tribunal of the
United States, any foreign country or any domestic or foreign state, and any
political subdivision thereof, and shall include the European Court of Justice.
"Current Market Price" shall mean, as of any date, the average
of the closing prices (or, if such securities should not trade on any trading
day, the average of the bid and asked prices therefor on such day) of the
Company Common Stock as reported on the New York Stock Exchange Composite Tape
during the ten consecutive trading days ending on (and including) the trading
day immediately prior to such date or, if the shares of Company Common Stock
are not quoted thereon, on The Nasdaq Stock Market or, if the shares of Company
Common Stock are not quoted thereon, on the principal trading market (as
defined in Regulation M under the Exchange Act) on which such shares are traded
as reported by a recognized source during such ten Business Day period.
"Exercise Event" shall mean any of the events giving rise to
the obligation of the Company to pay the $50 million fee under Section 9.5 of
the Merger Agreement.
"Exercise Notice" shall have the meaning ascribed to such term
in Section 2(d) herein.
"Exercise Price" shall have the meaning ascribed to such term
in Section 2 herein.
"Governmental Authority" shall mean any governmental agency or
authority (other than a Court) of the United States, any foreign country, or
any domestic or foreign state, and any political subdivision thereof, and shall
include any multinational authority having governmental or quasi-governmental
"Law" shall mean all laws, statutes and ordinances of the
United States, any state of the United States, any foreign country, any foreign
state and any political subdivision thereof, including all decisions of Courts
having the effect of law in each such jurisdiction.
"Lien" shall mean any mortgage, pledge, security interest,
adverse claim, encumbrance, lien or charge of any kind (including any agreement
to give any of the foregoing), any conditional sale or other title retention
agreement, any lease in the nature thereof or the filing of or agreement to
give any financing statement under the Laws of any jurisdiction.
"Merger Agreement" shall mean that certain Agreement and Plan
of Merger dated as of the date hereof among Xxxxx Xxxxxx Incorporated, a
Delaware corporation, Xxxxx Xxxxxx Delaware I, Inc., a Delaware corporation,
and Western Atlas Inc., a Delaware corporation.
"Merger Sub" shall mean Xxxxx Xxxxxx Delaware I, Inc., a
Delaware corporation and a wholly owned subsidiary of the Company.
"Notice Date" shall have the meaning ascribed to such term in
Section 2 herein.
"Notional Total Profit" shall mean, with respect to any number
of Option Shares as to which the Grantee may propose to exercise the Option,
the Total Profit determined as of the date of the Exercise Notice assuming that
the Option were exercised on such date for such number of Option Shares and
assuming such Option Shares, together with all other Option Shares held by the
Grantee and its Affiliates as of such date, were sold for cash at the closing
market price for the Company Common Stock as of the close of business on the
preceding trading day (less customary brokerage commissions) and including all
amounts theretofore received or concurrently being paid to the Grantee pursuant
to clauses (i), (ii) and (iii) of the definition of Total Profit.
"Offeror's Notice" shall have the meaning ascribed to such
term in Section 8 herein.
"Option" shall mean the option granted by the Company to
Grantee pursuant to Section 2 herein.
"Option Shares" shall have the meaning ascribed to such term
in Section 2 herein.
"Option Term" shall have the meaning ascribed to such term in
Section 2 herein.
"Order" shall mean any judgment, order or decree of any Court
or Governmental Authority, federal, foreign, state or local, of competent
"Profit Cap" shall mean $50 million, unless the conditions to
the payment by the Company of the additional $150 million fee under Section 9.5
of the Merger Agreement shall have occurred, in which case "Profit Cap" shall
mean $200 million.
"Put Consideration" shall have the meaning ascribed to such
term in Section 5 herein.
"Put Date" shall have the meaning ascribed to such term in
Section 5 herein.
"Put Period" shall have the meaning ascribed to such term in
Section 5 herein.
"Put Right" shall have the meaning ascribed to such term in
Section 5 herein.
"Registration Expenses" shall mean the expenses associated
with the preparation and filing of any registration statement pursuant to
Section 7 herein and any sale covered thereby (including any fees related to
blue sky qualifications and filing fees in respect of the National Association
of Securities Dealers, Inc.), but excluding underwriting discounts or
commissions or brokers' fees in respect to shares to be sold by the Grantee and
the fees and disbursements of the Grantee's counsel.
"Registration Period" shall mean, subject to Section 4 hereof,
the period of two years following the first exercise of the Option by the
"Regulation" shall mean any rule or regulation of any
Governmental Authority having the effect of Law or of any rule or regulation of
any self-regulatory organization, such as the NYSE.
"Total Profit" shall mean the aggregate (before income taxes)
of the following: (i) all amounts received by the Grantee or concurrently being
paid to the Grantee pursuant to Section 5 for the repurchase of all or part of
the unexercised portion of the Option, (ii) (A) the amounts received by the
Grantee or concurrently being paid to the Grantee pursuant to the sale of
Option Shares (or any other securities into which such Option Shares are
converted or exchanged), including sales made to the Company or pursuant to a
registration statement under the Securities Act or any exemption therefrom,
less (B) the Grantee's purchase price for such Option Shares and (iii) all
amounts received by the Grantee from the Company or concurrently being paid to
the Grantee pursuant to Section 9.5 of the Merger Agreement.
"Unexercised Option Shares" shall mean, from and after the
Exercise Date until the expiration of the Option Term, those Option Shares as
to which the Option remains unexercised from time to time.